Net News inflation story is slammed

Government officials have slammed a recent Cayman Net News headline and story that characterised a 1.3 percentage point inflation increase for the coming financial year as both a 60 per cent inflation rate, and a 60 per cent increase in inflation.

The 3 July front page story declared ‘Gov’t forecasts 60 per cent inflation’ in its headline, before characterising the inflation increase as a 60 per cent increase.

The paper later ran a correction for the headline, but stuck by it characterisation that the inflation movement – from 2.2 per cent for the 2006/07 financial year to 3.5 per cent for the 2007/08 financial year – represented a 60 per cent inflation increase.

Maria Zingapan, director, Economics and Statistics Office, said that both claims were inaccurate, misleading and contrary to accepted international statistical practice recognised by newspapers all over the world.

According to a GIS press release, Ms. Zingapan said the methodology used by the newspaper to claim a 60 per cent inflation increase was academically wrong, and that no recognised institution measures changes to inflation in that manner.

‘The comparison of the inflation rates should be stated simply as follows: the forecast inflation for financial year 2007-08 is 1.3 percentage points higher than financial year 2006-07. This is obtained by simple subtraction: 3.5 per cent – 2.2 per cent = 1.3 percentage points,’ Ms Zingapan said.

‘The problem with the Cayman Net News report is that they did their own calculation of what they call ‘increase in inflation rate’. They calculated the percentage increase of 3.5 per cent over 2.2 per cent; that is they divided 3.5 per cent by 2.2 per cent. That is how they arrived at 60 per cent – but this is a percentage change of a percentage change.’

Financial Secretary Kenneth Jefferson is particularly concerned that the publication has an online version that exposes it to viewers around the world. He said it sent the wrong message to Caymanian residents abroad, investors, tourists, and other persons with an interest in the Islands.

‘In the future, I would hope that a more mature and responsible approach of consulting with the appropriate government agency before finalising an article, will be adopted by the newspaper,’ he said.

He concluded, ‘On behalf of the Government, I wish to re-emphasise that any reference to inflation rates in the Cayman Islands being, or increasing by, 60 per cent, is wholly inaccurate.’